Glossary
/Repo Rate
What is Repo Rate?
Every time a commercial bank runs short on cash, they knock on the RBI's door to borrow money overnight. The interest rate the central bank charges for this emergency loan is the repo rate. It is the biggest dial the RBI controls to manage the country's economy. If they hike the repo rate, your bank instantly increases your home loan EMI and FD rates. When they cut it, borrowing gets cheaper, and the stock market usually throws a massive party.
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